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When you open an InvestSMART Professionally Managed Account (PMA), you choose from InvestSMART's range of Diversified Portfolios to invest in.
A list of the portfolios can be found here:
These managed portfolios comprise of Exchange Traded Funds (ETFs) or, in some cases direct shares. In particular, the InvestSMART Hybrid Income Portfolio invests in Australian listed hybrids and listed debt securities.
What is an Exchange Traded Fund?
An Exchange Traded Fund, or ETF, is a managed fund that trades on the stock market.
There are different types of ETFs, each with its own purpose, but most commonly, they will track or follow a particular index.
For example, if you want to follow or track the S&P ASX 200 (the top 200 Australian shares by market capitalisation), you could either buy each individual share (200 shares) or one ETF. The one ETF wraps up the 200 shares into one holding. By holding this one ETF, you get exposure to the movements of the ASX 200, less any fees.
Investing in ETFs is a form of passive investing, and they generally incur cheaper management fees, as fewer investment decisions are required to manage an ETF. They are also quite liquid and traded easily on an exchange.
You can see the holdings of each InvestSMART managed portfolio by navigating to its product page and scrolling to Key Facts > Holdings:
